Incidents:

In 2023, the company expects to achieve net profit of 315-400 million yuan (209.28 million yuan before adjustment, up 50.51%-91.13% year on year, 209.34 billion yuan after adjustment, up 50.47%-91.08% year on year); estimated net profit deducted from 300 to 380 million yuan (1807.6 million yuan before adjustment for the same period last year, up 65.96%-110.22% year on year. 1810.22% year on year after adjustment, 185.66% year on year - 109.83%). Among them, net profit corresponding to 2023Q4 is expected to be achieved of 0.40-125 million yuan (after adjustment for the same period of the previous year, 0.2 billion yuan, an increase of 1984%-6458% year-on-year). The reason for the retroactive adjustment to the same period of the previous year was that the company completed the acquisition of 100% of Beijing Pacific Can's shares in February 2023.

Comment:

The performance was impressive. Red Bull and Cambodia contributed more: (1) In terms of three-piece cans, Tencel Red Bull sales maintained a relatively rapid growth trend, and profit from a single can stabilized at a relatively good level. (2) In terms of two-piece cans, domestic sales are expected to decline year-on-year due to the industry's new production capacity and downstream beer and beverage consumption demand falling short of expectations. Overseas Cambodia's third phase of the 200 million can technical improvement project was successfully put into operation in June 23. Production capacity is operating at full capacity, and the profit of a single tank is significantly better than domestic. (3) In terms of aluminum bottles, thanks to the liberalization of the epidemic and the recovery of consumption scenarios, sales are expected to maintain double-digit growth in 23 years.

The traditional business is recovering steadily, and the new energy business is progressing in an orderly manner: (1) In terms of three-tablet cans, it is expected that plant-based protein drinks will continue to recover, and energy drinks will maintain a relatively rapid growth rate. In May '23, the company announced that it plans to build a three-piece can production line in Sichuan as a supporting layout for Tencel Red Bull. (2) In terms of two-piece cans, leading domestic companies are coming to an end in production expansion, and expectations for industry integration are increasing. The future supply pattern is expected to improve marginally, and single-tank profits are expected to rebound from the bottom; overseas Cambodia Phase III will continue to contribute to the increase in 24 years. (3) The company announced in January 24 that it plans to invest 100 million yuan to establish a subsidiary in Quanzhou to mainly produce precision structural parts for new energy batteries of various specifications for new energy vehicles and energy storage batteries, etc., and is expected to be put into operation within 2024.

Profit forecast: The company's net profit for 2023-2025 is expected to be 3.3/39/450 million yuan, and the PE corresponding to the current stock price is 13.6/11.3/10.0x. First coverage, giving a “buy” rating.

Risk warning: downstream demand is weak, industry competition intensifies, and profit and valuation judgments fall short of expectations